Boston Locks in Solar Energy Prices Lower than Traditional Energy Sources

Massachusetts Clean Energy Center (MassCEC) CEO Alicia Barton McDevitt today announced that residents and businesses in the city of Boston qualify for lower solar energy rates than rates for traditional sources of energy under the Solarize Massachusetts Program (Solarize Mass). 

Ms. Barton McDevitt made the announcement during a celebration of a new solar project installation at Dry Dock Plaza Park in Boston. As a result of the city of Boston’s participation in Solarize Mass, the average Boston participant who enters into a contract to buy solar electricity will now pay 11 cents per kilowatt hour, compared to the statewide price of 15 cents per kilowatt hour for traditional energy sources, which can be a mix of coal-fired, nuclear or natural gas generation.

Residents and businesses have until September 30 to participate in the bulk buying program, which would secure further price reductions as more participants sign up.

“A national model, this group pricing program locks in electricity prices and rates, and creates a network of locally-grown energy sources while creating local jobs,” said Energy and Environmental Affairs Secretary Rick Sullivan, who also serves as chairman of the MassCEC Board of Directors. “We applaud the city of Boston for its leadership in clean energy adoption.”

“I encourage everyone to join the clean energy revolution in Boston,” said Mayor Thomas M. Menino, who announced he plans to install solar panels on his home. “Solar power is now more affordable than ever in the City. It’s being installed on residences, businesses and municipal buildings at an increasing rate, and we are on the way to meeting our 2015 goal of 25 megawatts of solar energy in Boston.”

Under the leadership of Governor Deval Patrick, Massachusetts set a goal of achieving 250 megawatts of solar by 2017. As a result of the Solarize Mass program and other incentives, the state is more than halfway to its goal – with 129 megawatts of solar installed to date – the equivalent of powering more than 20,000 homes and eliminating greenhouse gas emissions from 13,870 cars per year.

“I hope Boston’s renewable energy leadership will inspire residents in this community and beyond to take advantage of this program that not only cuts energy costs, but creates local jobs,” said MassCEC CEO and Executive Director Alicia Barton McDevitt.

To date, a number of residents and businesses in Boston have banded together to participate in the program, contracting 18 solar systems for a total capacity of 89 kilowatts (kW).

Solarize Mass, which is available in 17 Massachusetts communities including Boston, offers five tiers of discounted pricing based on the total solar capacity contracted under the program. As more residents and businesses contract for solar, the price for solar energy drops. Solarize Mass is administered by MassCEC and the Massachusetts Department of Energy Resources (DOER).

“This is a bright day for Boston residents and businesses, as well as for the Menino family,” said DOER Commissioner Mark Sylvia. “Solarize Mass and the 103 Green Communities are helping spread solar power across the 339 of 351 communities that now have at least one state-supported solar electricity project.”

The average Massachusetts household uses 667 kilowatt hours per month, equivalent to an average $100 monthly bill for traditional energy sources. By installing a solar electric system, Boston homeowners entered into contracts to purchase solar would pay $73 with locked in pricing that hedges against potential future electricity price increases.

If a Boston participant wants to purchase a solar electric system under the program, the price for a 5 kW system (the average size for a home) is currently $21,000, rather than the state average at the beginning of the program of over $26,000.

A combination of federal and state incentive programs like Solarize Mass cover the costs of the investment over the lifespan of a solar installation. Under the current pricing, business and homeowners that purchase a 5 kW system could save $7,300 through federal and state tax credits and up to $4,250 in MassCEC rebates. The remainder of the costs would be recovered within approximately five years.

A committee of Boston volunteers and municipal officials selected a designated installer, Marlborough-based SolarCity.

Other solar installation incentives
To offset the cost of installing solar panels, residents and businesses are eligible for a combination of renewable energy incentives including a federal tax incentive of 30 percent and a state tax incentive of 15 percent of the total installation cost, up to $1,000. MassCEC also provides solar rebates through its Commonwealth Solar II Program. Solar projects are also eligible for no and low money down programs through solar installation companies.

Solar energy systems provide residents and businesses with two possible income streams. First is net metering, which allows residents and businesses to deposit any excess energy they generate as a credit into their utility account. The utility, much like a bank, would house credits that can be drawn down against existing or future energy costs. Second, there is an opportunity – under the Solar Renewable Energy Certificate Program (SREC) – for utilities to pay homeowners and business for the solar power they generate.